Print firm wins damages after receiving negligent advice

A print firm has been awarded damages after receiving negligent advice when entering into a franchise agreement.

The firm had contacted a company which offered franchises to run design services under its name. The company identified one of its existing franchises which could be sold as a going concern.

Negotiations began and the printers were told that it would cost £15,000 to refit the premises once the business was purchased. This figure was then entered into the business plan.

The franchise company also told the printers that they would be given client data from the existing business prior to launch. The franchise agreement was then drawn up and signed.

However, the franchise company then refused to place the client data on to the new business’s computer system as agreed. The cost of refurbishment also turned out to be double the figure stated.

The printers claimed damages on the basis that the franchise company had failed to exercise reasonable care when providing important advice. If they had known the true cost of the refurbishment, they would have negotiated a lower purchase price.

The court ruled that the franchise company had been negligent and in breach of its duty of care when giving advice about refurbishment costs. It had also breached its contractual obligations by failing to provide the customer data as agreed and it was therefore liable to pay damages.

Please contact us if you would like more information about the issues raised in this article.

Bribery Act introduces new offences and 10-year jail terms

The Bribery Act, which introduces the threat of unlimited fines and 10-year jail terms for offenders, has now received the Royal Assent and is expected to come into effect by October.

The new Act covers the general offences of offering or accepting a bribe and creates the specific offence of bribing a foreign public official.

It also introduces a corporate offence of failing to prevent bribery by people working on behalf of a business.

The maximum penalty for bribery increases from seven to 10 years’ imprisonment. Corporate offences of failing to prevent bribery are punishable by unlimited fines.

Companies that fall foul of the new law may be able to avoid conviction if they can show that they had put adequate procedures in place to try to prevent offences occurring.

The Ministry of Justice is expected to publish guidelines within the next few months as to what these procedures might entail. The new guidelines are likely to cover areas such as anti-bribery policies, staff training, corporate entertainment and due diligence relating to business associates.

We shall keep clients informed of developments.